You are the Chief Financial Officer (CFO) for a Toronto-based Biotech company. Your company has $100,000,000...
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You are the Chief Financial Officer (CFO) for a Toronto-based Biotech company. Your company has $100,000,000 of excess cash and on June 7, 2023, you notice that the Bank of Canada Canadian Overnight Repo Rate Average (CORRA) is 4.50% (this is an annualized overnight rate). If you consider depositing your company's excess cash ($100,000,000) for 30 consecutive days in the Overnight Repo Rate, calculate the after-tax interest income assuming that the tax rate on interest income is 40%. Also, assume that there is no transaction cost. (Do not use the $sign. If your answer is $123,456.78, enter 123456.78) You are the Chief Financial Officer (CFO) for a Toronto-based Biotech company. Your company has $100,000,000 of excess cash and on June 7, 2023, you notice that the Bank of Canada Canadian Overnight Repo Rate Average (CORRA) is 4.50% (this is an annualized overnight rate). If you consider depositing your company's excess cash ($100,000,000) for 30 consecutive days in the Overnight Repo Rate, calculate the after-tax interest income assuming that the tax rate on interest income is 40%. Also, assume that there is no transaction cost. (Do not use the $sign. If your answer is $123,456.78, enter 123456.78)
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Answer rating: 100% (QA)
To calculate the aftertax interest income we need to determine the interest ea... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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